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Mutebile: S. Sudan Crisis Still Hurting Uganda's Growth

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diagnosis geneva;”>The credit growth in the private sector has been picking up and is expected to increase over the remaining part of the year and in the next two years.

While announcing the new CBR, Governor Bank of Uganda Prof Emmanuel Mutebile highlighted a number of factors for the persistent sluggish growth of the economy, among which is the raging instability in neighbouring South Sudan.

The other downside risk to the GDP, he said, is the continued weak performance of the agricultural sector.

According to the Central Bank’s Research Executive Director Dr. Adam Mugume, the country had before December last year been exporting $ 50 million worth of goods per month to the neighbouring country, which figure has now reduced to between $20-30 million.

“South Sudan used to be our major export destination before the outbreak of the crisis and now it has been replaced by the Democratic Republic of Congo,” he said.

“We really hope that in the coming fiscal year the situation will be stable again.”

Dr Mugume added that with a more conducive atmosphere in the war-torn nation while the rest of the big world economies heal from the recession, Uganda will be able to see an expansion in its exports.

He noted that the Bank is projecting GDP growth for next Financial Year’s GDP to exceed 6 percent but only in hope that the South Sudanese crisis will have subsided.

Meanwhile, according to this month’s Monetary Policy Statement, inflation continued to decline with the headline and core inflation dropping to 5.4 and 3.3 percent respectively.

The decline in the headline inflation was mainly attributed to a drop in food crop prices which came as a result of an increase in food supply.

The drop in core inflation was attributed to the exchange rate appreciation over the last year.

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